Indian flotation back on menu

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Insurance giant Standard Life is understood to be reviving plans for a flotation of its Indian joint venture as the market recovers from a regulatory overhaul and new entrants have raised the stakes on competition.

But suggestions that the group, which has a joint venture in India with the Housing Development Finance Corporation (HDFC), could float the business as soon as the end of 2013 have been dismissed by sources close to the business.

Last week Standard Life told analysts its Indian business grew premiums on policies by 4 per cent at the same time as non-state backed insurers saw their market shrink 23 per cent. Other insurance companies, including Japan’s Mitsui Sumimoto Insurance and Nippon Life, have formed similar joint ventures in the last year, although product sales have tumbled in India since changes to regulations in 2010.

Nathan Parnaby, chief executive of Asia and merging markets for Standard Life, said the changes have allowed the business to develop products faster. A spokeswoman for Standard Life said: “As we have stated before, we would consider a partial IPO of the Indian Life joint venture should legislation and market conditions allow.”

In 2008, Standard Life upped its stake in HDFC to 26 per cent – the limit for foreign ownership in India – valuing the venture at about £360m. But plans to list 10 per cent of the venture by 2009 did not go ahead. Parnaby recently told The Scotsman that the business broke into profitability in the second half of 2011.

India’s finance minister, P Chidambaram, left, last month pledged to boost reform for banking, insurance and other sectors in an effort to 
improve India’s competitiveness. It is thought he might consider upping foreign ownership of businesses closer to 50 per cent.